Dutch foundation seeks consumer damages over Apple, Google app payments

FILE PHOTO: An employee uses an Apple iPhone to demonstrate to reporters how to pay using the Apple Pay service at an Apple store in Beijing, China, February 17, 2016. REUTERS/Damir Sagolj/File Photo

AMSTERDAM (Reuters) - Apple and Google face a potential class action lawsuit in the Netherlands over app store charges, after a foundation headed by Dutch entrepreneur Alexander Klöpping began gathering claimants.

The action, which still faces legal hurdles before any court hearing, reflects growing criticism over how much the two firms charge developers for payments on their app stores, while the Netherlands has become increasingly popular as a jurisdiction to pursue complaints against multinational firms.

Klöpping is a co-founder of Blendle, a digital platform that enables users to buy individual news articles, which he sold in 2020. He told Reuters his determination to pursue the tech giants grew out of his experience at Blendle.

"The reason it's getting so much attention right now is that everyone feels in their gut that there's this imbalance of power when it comes to big tech companies."

He said while developers have complained most about app store practices, costs are ultimately passed on to consumers.

Klöpping's App Store Claims Foundation is being represented by law firm Hausfeld, with funding from Fortress Investment Group.

Apple did not reply to requests for comment. A spokesperson for Alphabet, which owns Google, had no immediate comment but said the company had reduced fees on Google Play.

At this stage in the Dutch class action proceedings -- which were codified in a 2020 law -- formal notice has been sent to Apple and Google.

Hausfeld lawyer Rob Okhuijsen said the next step will be submitting evidence to the Amsterdam District Court in April. If a judge agrees, the court would then begin weighing the merits of the complaint.

CMS lawyer Bart-Adriaan de Ruijter, who is not involved in the case but specialises in corporate litigation, said the Netherlands is becoming a magnet for suits against multinationals. Recent instances include a $339 million action launched last month against Airbus and a ruling last year ordering Shell to cut its carbon emissions.

Apple has already been taken to task by Dutch authorities for its app store practices. In December the Authority for Consumers and Markets (ACM) ordered Apple to make it possible for dating app developers to offer non-Apple payment choices in the Netherlands.

Apple, which is appealing, has been fined $5.7 million four separate times for failing to comply, most recently on Monday.

(Reporting by Toby Sterling; Editing by Edmund Blair and Michael Urquhart)

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